Vladimir Putin’s abusive stranglehold over European gas supplies has been laid bare by explosive EU documents, exposing deliberate violations of EU law and a pattern of political bullying over almost a decade.

The longest investigation in EU history found that the Kremlin-controlled energy giant Gazprom has used its enormous power to pressure vulnerable states in Eastern Europe, and to fragment the EU’s unified energy market with coercive pricing policies.

The day after the expulsion of the group of Russian diplomats from some European Union countries, Germany gives final approval for the construction of the Nord Stream 2 gas pipeline. As one of the managers of the Polish company wrote rightly, it was not possible to choose a worse moment for such a decision – writes Wojciech Jakóbik, editor-in chief of BiznesAlert.pl.

Germany’s agreement after Skripal

The Federal Office for Shipping and Hydrography gave consent to the arrangement of Nord Stream 2 in the exclusive economic zone of our western neighbor. Earlier, Germany has already agreed to run the bus over their territorial waters. This means that in this country the gas pipeline at issue already has all the necessary approvals to start work. It needs more – in Russia, Finland, Sweden and Denmark.

However, the signal from Germany is clear. The Russians can count on business as usual even after attempted murder with the use of chemical weapons in the European Union, i.e. after the Skripal case, after subsequent reports of cyber attacks and Russia’s interference in the elections in the West.

This is not the end of signals. Former Austrian Minister of Finance, Jorg Schelling, became a Gazprom consultant.

According to Oberosterreichischen Nachrichten, Schelling will consult the Nord Stream 2 project criticized in Poland and several other countries of Central and Eastern Europe. The former minister confirmed the revelations of the Austrian newspaper, but did not reveal any more about the nature of his employment in Gazprom.

The state-owned OMV is the financial partner of Nord Stream 2 AG, which is one hundred percent owned by Gazprom. It was Schelling who hired as the president of OMV Rainer Seele, who is now an active defender of the disputed project. Former minister and current president of OMV together visited Russia to talk about economic cooperation.

Nord Stream 2 is to achieve a capacity of 55 billion cubic meters annually and be ready by the end of 2019. Its partners, like OMV, count on cheap gas. Critics are afraid of negative political, market, legal and security impacts.

Paralyzed Europe

The project may still be delayed by Denmark’s decision to block consent in exclusive territorial waters due to arguments in the field of security and foreign policy, which is allowed by the newly adopted law. A new route, bypassing Denmark, could be painful. Sources of BiznesAlert.pl even talk about a year or longer delay. In this case, Gazprom and its financial partners from Europe to would have to increase expenditure on the project currently estimated at EUR 9,5 billion.

However, it would be more disadvantageous for Gazprom to sign a new transmission contract with Ukraine. The present ends in 2019, and in the past the Russians declared they would not sign a new one. Among other things, under the influence of Germany, they said that they would ensure a minimum level of supply, and the European Commission notified the participation in the negotiations.

The Polish Foreign Minister after the expulsion of four Russian diplomats said that after the Skripal case, it will be more difficult for the Russian side to defend Nord Stream 2. There has been a rash of optimistic comments after this statement. It turns out that despite a series of negative signals from Russia, Europe can not respond equally clearly. It did not remove its sanctions, but it did not introduce any new ones either, apart from symbolic expulsions. It is paralyzed by the Nord Stream 2 project, which – as the example of Schelling shows, but also the more well-known Gerhard Schroeder – may be corrupt in nature. Although Russia’s actions are increasingly worrying, some Europeans still prefer to make money on their dealings with Gazprom.

Meanwhile, Germany’s consent will theoretically allow the Russians to start the construction of the section on the territory of the country, that is in the European Union. This may make it difficult to include Nord Stream 2 as revised by the gas directive proposed by the European Commission. It was to lead to the subordination of investment to EU law. The revision was to concern new projects. The dugged Nord Stream 2 can be defined differently. Germans would probably make sure that it was not “new” anymore.

Gazprom does not recognize the verdict in favor of Ukrainians. It does not supply gas despite the bonds resulting from arbitration. Ukrainian politicians warn that the pressure in gas pipelines on the Dnieper falls. All this takes place under the guise of full-fledged activities – says Wojciech Jakóbik, editor-in-chief of BiznesAlert.pl.

Gazprom did not come to terms with the defeat in court. It announced that it would question the arbitration in favor of Naftogaz using “all legal means”. For now, it decided that it would fight for extra time in bilateral negotiations. The Russian company refused to supply gas to Ukraine from the beginning of March until reaching a provisional agreement in this matter.

Gazprom wants extra time

Naftogaz announced a court triumph over a Russian supplier. In response to the defeat at the arbitration court in Stockholm, Gazprom dismissed the verdict, announced the appeal and refused to deliver gas to Ukraine. However, it did not do it through an unannounced turning off a gas tap known from the gas wars of 2006, 2009 and 2014. It announced the fight with the use of all available tools – legal.

In this case, Gazprom used the rhetorical figure about the need to sign an additional agreement on the terms of delivery to Ukraine and returned the prepayment provided by the Ukrainians. – Acting in good faith, we returned the money received from Naftogaz Ukraine. Deliveries will not be delivered from March 1 – said vice president Aleksander Medvedev. It was an element of surprise, which, however, is harder to consider as a hostile act. Gazprom wants extra time, but in bilateral relations and regardless of the verdict of the court, which it does not recognize.

Gazprom is like a “street hustler”

Nevertheless, the Minister of Foreign Affairs of Ukraine, Pavlo Klimkin, reacted without mincing his words. He said that Gazprom behaves like a “street hustler”. – Gazprom has dropped to the level of the “street hustler”. It does not complete the arbitration in Stockholm, and at the same time reduces pressure in gas pipelines by non-compliance with obligations – the minister wrote on
Twitter.

Perhaps for this reason, the President of Ukraine Petro Poroshenko called a special session of the National Security and Defense Council. – Gazprom has traditionally used the advantage of frost and demonstratively does not acknowledge the Stockholm arbitration award not only regarding the transfer of debts, but also the reduction of pressure in gas transmission pipelines – said the president of Ukraine confirming the words of Klimkin.

Test of strength of Ukraine

In the period of intensified gas consumption from storage facilities, it is more difficult to maintain the technological pressure of Ukrainian gas pipelines, what may threaten the security of supplies to Europe. Due to the hybrid gas war of Russia, it will be more difficult to blame the Russians for the possible crisis. Gazprom does not turn off the tap, at most it tightens it and lowers the trasit volume, which it may later justify it in various ways, in the first place by further questioning the arbitration findings in Stockholm. Gazprom may present a problem in legal terms, although it probably stems from the old, good policy of Kremlin blackmail in a new, more sophisticated version.

Enraged Klimkin also threatened to take over Gazprom’s assets. – We’ll get them. Their assets in Europe have been known for a long time – he tweeted. All confiscations must be carried out in accordance with the law. For Ukraine to keep its face in relations with the West, it must move within the limits of the law, which Gazprom learned, currently conducting a hybrid gas war with the pretense of full-fledged actions.

Operation of the Russians may also be aimed at testing the strength of the Ukrainian transmission system and the cold blood of the administration there. Kiev must maintain peace and full transparency, informing about the developments of the European Union through the Energy Community to which it belongs.

The European Commission must step in

Temporary agreements recalled by Gazprom were concluded under the tutelage of the European Commission in 2014 and 2015 after long-term trilogue talks. There was no such necessity since November 2015, when Ukraine gave up supplies from the Russians. However, the arbitration award imposes an obligation on Ukrainian Naftogaz to purchase 4 billion cubic meters annually. In recent years, the Commission has helped Ukrainians to get better price conditions for deliveries.

It is crucial for Poland

According to the President of Ukraine, the trilateral talks will soon start again. In the face of the escalation of the problem, the Commission should consider including in its talks its request to establish during the negotiations a minimum level of supply through Ukraine, which will guarantee the economic stability of the country. This may be important for the contested Nord Stream 2 project, that is also for Poland’s interests. For this reason, Warsaw should observe, and perhaps engage in, attempts to calm the gas hybrid war in Ukraine. Stability of supplies through the territory of the eastern neighbor will also be important for investment decisions of PGNiG and Gaz-System, who have already engaged in cooperation on the Dnieper, and also probe new opportunities.

Seven German politicians protesting against Nord Stream 2 seem few. However, this is the tip of the iceberg. The resistance blade in Germany is directed against the branch of the disputed gas pipeline, namely EUGAL, without which Nord Stream 2 will be a gas pipeline nowhere. It turns out that it can cost the German taxpayer a lot – says Wojciech Jakóbik, editor-in-chief of BiznesAlert.pl.Czytaj dalej„EUGAL at gunpoint. The Nord Stream 2 branch can be expensive”→

Polish government’s documents have concluded that controversial pipelines from Russia to Germany should be a subject to EU legislation. This may reduce its harmfulness for Central and Eastern Europe markets or even – in case of Nord Stream 2 – block the construction. Poles’ new opinion confirms it, writes Wojciech Jakobik, BiznesAlert.pl’s editor-in-chief.Czytaj dalej„Poland smashes Nord Stream 2. Report on UNIAN”→